Investing.com — Bernstein raised Adidas (OTC:) to Outperform in a note Monday, setting a new price target of €300 on the stock, up from €212 per share.
The firm pointed to a strong growth trajectory and improved market positioning for the sportswear giant.
After years of declining market share, Adidas is now on a path to recovery and sustained growth, according to Bernstein’s latest analysis.
“Adidas is poised for a multi-year winning streak,” Bernstein analysts declared, highlighting a projected 70% EPS compound annual growth rate (CAGR) over the next two years.
This growth is said to be underpinned by positive data from channel checks, consumer surveys, and real-time pricing data, all of which suggest a consistent ~10% growth rate through 2026.
Lifestyle Footwear and Apparel are expected to be the primary growth drivers, with products like the Samba and Gazelle leading the charge.
“Terrace (i.e. Samba, Gazelle) has been a 2024 success story that continues to see strong momentum into 2025,” Bernstein stated.
The firm notes that the company’s management is also launching new franchises in both categories, which they state are projected to contribute significantly to incremental growth of approximately €5 billion from 2024 to 2026.
Bernstein’s forecast indicates that this growth will lead to a substantial increase in margins, with an estimated EPS of €11.82 by 2026, marking a 70% CAGR from 2024 to 2026—outpacing other sportswear brands.
Despite the positive indicators, Bernstein believes the market is undervaluing Adidas, with the stock trading at less than 20 times FY26 EPS, compared to a 25x average in pre-COVID years.
“Putting the stock in-line with pre-COVID valuation gives us 29% upside,” Bernstein concluded, adding that a strong product cycle could drive an additional 20 points of upside.
